Introduction to Online Payment Gateway
Online payment gateway is a web-based application that acts as an intermediary between e-commerce merchant website and a bank to authorize and authenticate online payments.
The payment gateways transfer the information regarding the transaction between the bank and the payment portal. Payment gateways enable enterprises to collect money through a bank selected by the customer, safely and securely.
Market Overview and Growth Highlights 2019-2028
The Middle East online payment gateway market is observing vibrant growth on account of upsurge in e-commerce industry, rising prevalence of cashless transactions, increasing internet penetration and availability of secure online payment options for both businesses and consumers. Moreover, a surge in the automation of transaction processes have been observed owing to advancements in mobile payment technology and the adoption of IoT, which is also facilitating consumers to initiate payments via different device modules.
The Middle East online payment gateway market is anticipated to grow at a CAGR of 16.80% over the forecast period, i.e. 2020-2028. The market is projected to grow vibrantly in the upcoming years owing to increasing internet penetration, advancements in online payment technology, rise in the use of m-wallets in the region and increase in preference for online retailing. Additionally, growing trust of consumers in online shopping, coupled with awareness for ease of online transactions, is helping digital payments gain popularity over traditional cash transactions.
The Middle East online payment gateway market registered a value of USD 2404.58 Million in the year 2019 and is further forecasted to reach USD 9610.07 Million by the year 2028. The market is also fragmented with each country having its own initiative for digitization and e-transactions. Additionally, the region’s central banks are also setting up national payment gateways (NPG) for online transactions in order to provide safe & secure payment gateways to merchants & consumers.
Market Segmentation Synopsis
By Organization Size
The Middle East online payment gateway market is segmented on the basis of organization size into small & medium enterprises (SMEs) and large enterprises. The large enterprises segment accounted for the largest market share in the year 2019, backed by the high volume of transactions and the rising number of bulk transactions. The small & medium enterprises segment, on the other hand, is gaining traction in the market on the back of growing awareness among merchants for the rising incidences of payment frauds. Online payment gateway systems offer fraud management & verification technology to ensure secure transactions and also provides greater ease of convenience for utilization.
By Payment Gateway Type
The Middle East online payment gateway market is segmented by payment gateway type into hosted and non-hosted. The hosted segment is anticipated to gain the largest market share over the coming years on account of the numerous benefits provided by these systems, such as reduced merchant liability, better security and ready to use set-up for transactions. Most of the merchants are inclined toward the use of hosted methods, as these systems help in the reduction of fraudulent activities & focus more on the core business. Furthermore, the hosted systems are compliant with PCI DSS (Payment Card Industry Data Security Standard), making these systems reliable and safe for payment processing,
The non-hosted segment, on the other hand, is estimated to witness significant growth over the coming years, as various businesses prefer to have full control over the checkout process. Moreover, the non-hosted systems can be integrated with the billing solutions through the use of APIs, which is anticipated to provide huge opportunities for the growth of the segment in the Middle East online payment gateway market.
By End User Industry
The Middle East online payment gateway market is segmented by end user into BFSI, retail, travel & tourism, media & entertainment and others. The retail segmented accounted for the largest market share of 37.65% in the year 2019 and is estimated to grow with the highest CAGR of 18.14% during the forecast period. The region exhibited significant advancements in e-commerce penetration in the recent years, backed by the increasing consumer confidence in the authenticity of available online products and the presence of domestic brands on shopping portals, which further contributed significantly to the growth of the retail industry in the region. As a result, there is a surge in the utilization of online payment systems, thereafter, raising the need for online payment gateway systems. CLICK TO DOWNLOAD SAMPLE REPORT
Market Drivers & Challenges
Growth Indicators
Increase in Online Transactions to Promote Market Growth
Middle East is one of the fastest growing e-commerce markets in the world. According to the statistics by the International Trade Administration (export.gov), among all the GCC states, UAE is the leader in the e-commerce sector. The statistics also stated that the in the year 2018, e-commerce market in UAE was expected to hit USD 10 billion. Further, the UAE Ministry of Economy has also estimated that out of the total sales in the UAE, the e-commerce sector registered a share of 10%. The consumer demographic in Middle East constitutes of a young internet-savvy population who are into greater digital penetration by means of high social media utilization. The population also registered a remarkably high disposable income. The market in the region is also favored by the government initiatives for cashless transactions that have further created familiarity with the process of e-payments. This is also resulting in the availability of different forms of online payment channels, which is resulting the need for the deployment of online payment gateway systems.
Rising Demand for Mobile Wallets
Mobile wallets or m-wallets are the main contributor to the digital payment network. Backed by the increasing penetration of smartphones, aided by faster internet speeds and safe payment options are facilitating the market growth. Mobile wallets are gaining market traction as domestic and international tech players, telecom operators and local banks are offering mobile wallet-based solutions. As smartphones capture most of the e-commerce transactions in the region, mobile wallets offer a more reliable, secure and convenient way to pay for the transactions. Moreover, with the launch of several mobile payment services in the region, along with the focus of the operators in the mobile payment services industry to expand their market presence in the region, there is a rising need amongst the operators to deploy online payment gateway solutions, which is anticipated to drive the market growth.
Barriers
Lack of regulatory framework for online payment gateways or for the operators operating in this market, is one of the major factors anticipated to hamper the market growth. A non-regulatory environment makes the system vulnerable as sensitive data of both merchants and consumers are at a risk of theft and manipulation. Absence of payment security protocols to ensure secure online payments is also raising the fear amongst individuals to use online payment methods. Moreover, with the increasing number of data-breaches and cyber-attacks, individuals lack the trust in the online services and therefore prefer for cash payments. On the other hand, high setup cost of online payment gateways is further anticipated to restrict the market growth.
Competitive Landscape
Some of the affluent industry leaders in the Middle East online payment gateway market are Telr Pte Ltd., Payfort International FZ LLC, Checkout.com, 2Checkout, PayTabs, CASHU, and Infibeam Avenues among others.
Moreover, other key and niche players are constantly working towards the expansion of product portfolio and increase their presence in the online payment gateway market. Enterprises in the region are also investing in high quality R&D so as to develop highly secure online payment gateways in order to gain competitive edge in the Middle East online payment gateway market.
